Grading Scale
CRISIL's
MFI Grading is a current opinion on the ability of a MFI to conduct its operations in a scalable and sustainable manner. The MFI Grading is a measure of the overall performance of an MFI on a broad range of parameters under CRISIL's MICROS framework. The grading is assigned on an eight-point scale -
mfR1 (highest grading) to
mfR8 (lowest grading). There are no individual definitions for each grading.
This grading assigned cannot be considered to be a proxy for timely payment of interest and principal. Nor is it a recommendation to purchase, sell or hold any debt instrument issued by a MFI. The microfinance grading also does not involve an audit by CRISIL. The microfinance grading assigned by CRISIL is not for use by MFIs in their external communication, promotional material or member passbooks and cannot be used for mobilising deposits/savings from their members or general public.
CRISIL has developed the microfinance grading to meet the requirements of the constituents of the sector - apex MFIs, banks, MFIs and social investors. Hence the MFI Grading is not a credit rating and does not indicate the credit worthiness of an MFI (obligor). The MFI Grading cannot also be compared with the credit rating assigned to a debt instrument (fixed deposits, debentures, etc) of the same MFI.
